July 30, 2015
Angry Birds Activity Park - St. Petersburg, Russia
JRA recently worked with Rovio and FORTGROUP to develop the new Angry Birds Activity Park St. Petersburg within the highly anticipated Europolis Mall. The attraction is a first of-its-kind family destination that blends the exciting world of Angry Birds with the rich history and culture of St. Petersburg. Through a combination of scenic environments, theatrical lighting, dynamic sound, media and special effects, guests are immersed within the mysterious Piggy Island – home to the Angry Birds and their nemeses the bad Piggies.
Throughout the exploration of the Island, guests have the opportunity to participate in wide variety of activities that allow them to be the engine of their own excitement. The facility also features a number of learning opportunities that educate guests in a fun and engaging manner. In addition, guests can sit down for quick snack within a colorful café, purchase unique Angry Birds gifts, clothing and memorabilia within a specialty store, and even host their next birthday within one of attraction’s several themed party rooms.
The new Angry Birds Activity Park is now the premiere place in St. Petersburg for guests of all ages to eat, play and learn.
But don't take our word for it - have a look!
July 29, 2015
What you want to avoid at your museum or theme park...
Greetings! In last week's segment, we tackled the finer points of determining attendance and capacity for your museum or theme park. We’ll now introduce you to a special tool we call a program (not to be confused with programme, the European and Asian term for schedule).
The main purpose of the program is to ensure a comfortable experience for your guests. With this simple chart, you can make sure queue lines are manageable and attractions diverse. Let’s look at an example, shall we?
Let’s say that the peak on-site attendance (your park’s maximum attendance at any one time) is 10,000, and you have about 140,000 square meters of attraction space to play with. You want to make sure that your 10,000 guests aren’t all at Screaming Terror X roller coaster (unless you want your 10,000 guests screaming at you)! In fact, you want your visitors to be able to experience approximately 1.5 rides or shows per hour. Doing the math, your park needs to operate at an hourly capacity of 15,000.
So you come up with a mix of about 30 rides and shows, catering to families and singles, young and old, thrill-seeking to thrill-averse. To determine whether this satisfies your required hourly capacity, you’ll need to determine the hourly capacity of your individual attractions. For example, let’s say you are including a 4D theatre (with stunning visuals executive-produced by JRA ☺) in your attraction mix. The theatre has an instant (as in, per show) capacity of 150, and, including pre-show, has a total duration of 5 minutes. A five-minute experience means it can run 12 times per hour. Multiply that by your instant capacity, and you find that, in one hour, 1,800 people can funnel through your 4D Theatre. You would continue in this vein for all 30 of your shows and attractions to achieve your total theoretical capacity.
Let’s say that your total theoretical capacity for all rides and attractions is 27,000. Due to delays in loading/unloading riders or the dispatching of the rides from the station (guests need extra assistance, lap bar checks, safety checks, etc.), you almost never run at 100% hourly capacity. 85% is a number used as a more realistic hourly capacity. Thus, you would multiply your theoretical capacity by 85% to determine your total operating capacity, which in this case is 22,950.
From the looks of things, you’ve got more than enough rides, shows and surprises to ensure that your guest spends more time having fun and less time standing in queues. Congrats! As your attendance increases over the years, you’ll continue to use the program to determine your future expansion efforts.
Next week, we’ll close our series on capacity by borrowing some facts and figures from our good friend, Jim Higashi. Thanks for reading!
Tags: Blog N Learn
July 22, 2015
As we mentioned last week, feasibility is the theme for our July blog series. One main aspect of assessing feasibility is determing the capacity of of your museum or attraction. Over the next three weeks, we'll look at the various aspects and calculations behind capacity so you'll be in the know when you talk to your feasibility consultant or operations team.
There are two standard units for measuring attendance – the design day and the peak day. A design day represents the number of people your facility is designed to handle. Once you have this information, you can define space requirements and operational flow, the way your guests flow through the space. If your facility is a museum, for example, you will want to design your exhibits so that there is 1 meter of space around each guest. Nothing ruins a guest experience more than feeling crammed into a gallery or pathway!
Peak day attendance, as the name suggests, is the number of people your facility can expect on an extremely busy day. Since you may only have 6 peak days per year (unless you’re Disney), you don’t want to design your facility to peak day attendance, as this would result in your museum or attraction looking empty the other 359 days of the year.
So how does one calculate design day attendance, you ask? Let’s perform a little exercise for a theme park (note, these are JRA’s standard theme park calculations based on our experience – other companies’ percentages may vary):
By knowing your design day attendance, you can begin to develop your ride and exhibit capacities. You do this by creating a program, a chart that maps out the individual capacities for your rides, shows, attractions, retail and restaurants. An attraction or exhibit program helps you ensure that you have the right mix of experiences so you don’t end up with long queues and disgruntled customers. We’ll dive deeper into this valuable document in next week’s segment. In the meantime, we hope that this post helped lift the fog on calculating capacities and provided you with a useful tool in maximizing visitor satisfaction.
Tags: Blog N Learn
July 16, 2015
With a "thumbs up" from a feasibility consultant, you can have confidence knowing that you are developing your museum or attraction project at the right time, in the right place.
Last week, Brian Sands, Vice President and Principal of Economics at AECOM, begain to lift the veil of the process of economic feasilbility analysis. We learned why a feasibility consultant was important, the right questions for you to ask them, and the questions you should be ready for them to ask you.
Today, we delve into the process itself, and how it can keep your project (and your capital in developing that project) on the path to success.
JRA: Without giving away any trade secrets, what is your process for determining whether a project is feasible?
Brian Sands: The general process of determining a project’s demand potential and financial feasibility is not a secret, as shown by the simplified approach which I outline below. However, that does not make it easy for anyone to complete – even experts like us can find it a challenge sometimes. What is needed is disciplined adherence to the process, but also creativity to ensure that the best can be made of the available information (which may be limited in some markets, or regarding the performance of a new concept) as well as the time and resources available to complete the study (which similarly may be limited). When I say creativity, I don’t mean simply making things up, but rather combining the best available information within the time available, together with strong experience evaluating similar projects in other locations, and with good knowledge of the characteristics and performance of comparable projects. Under ideal circumstances, the eventual answer becomes apparent during the study, but under less than ideal circumstances an experienced economic consultant eventually determines the boundaries of probable performance.
JRA and AECOM teamed up on The Henry Ford in Dearborn, Michigan.
As to the process for a market and feasibility study, also sometimes known as a business plan, it is relatively straightforward and typically includes the following tasks:
· Project initiation and client team consultation
· Concept and location evaluation
· Review of general markets, such as residents and tourists
· Comparable and competitive projects analysis
· Demand potential evaluation and client consultation
· Preliminary physical planning guidelines
· Ticket pricing and financial feasibility
· Client consultation and report finalization
Frequently, we are asked to provide some additional tasks, which may include one or more of the following:
· Design/planning team workshop(s) participation
· Survey, focus group, or other primary research
· Economic impact analysis
· Discussions with public sector entities regarding public benefits for the project
· Detailed temporal and/or physical capacity analysis
· Pricing alternatives evaluation
· Warranted investment analysis
· Land/lease deal negotiation
· Developer/operator solicitation and evaluation
· Multi-location evaluation and roll-out strategy
· Acquisition target analysis
· Financing request evaluation
· Ongoing monitoring
We also are oftentimes asked to provide suggestions regarding potential other consultants for the project, such as the following:
· Branding and marketing
· Operations and management
· Intellectual properties
· Specialized operations, such as retail, foodservice, events, traveling exhibits, ticketing, etc.
The AECOM One World Trade Center Team.
JRA: What happens if you (AECOM) determine that a project is a bad idea?
Brian Sands: We certainly don’t like for this to occur. When we first start discussing a potential economic study with a client, we try hard to quickly identify those projects that seem highly unlikely to reach the level of demand, scale, or performance that the client has in mind, so that we can then discuss with them as diplomatically as possible our initial thoughts and for both sides to consider what might be necessary for the project to succeed in its initially proposed form, or perhaps how the initial concept might be modified to increase its likely performance and success. This is important since we, as an independent consultant with a track record of success that is over 50-years long in the industry, we need to ensure that we are able to maintain our integrity within the industry, and that we don’t waste a client’s money.
Despite taking the steps noted above, it does happen that sometimes we get some ways through an assignment and reach a point where we realize that the client’s expectations are significantly out of alignment with what the market and comparables are indicating is possible without some sort of extreme measure (such as a quality, scale, and/or investment level that is well beyond a precedence in the industry or available market). In those situations, we complete documentation of our research and analysis as well as our conclusions, and then setup a discussion with the client about our findings and also are ready to talk about potential alternatives for the project, be it in terms of concept, scale, or even location. Such conversations are never easy, but when given clear information, most clients will after some time accept the findings and eventually go on to be very appreciative of our candid assessment and advice. Ultimately, our job is to ensure that the client and everyone involved with the project is not wasting their time or money, and they are grateful for useful advice that helps them to succeed in a very competitive and ever changing marketplace.
Another AECOM/TEA collaboration - Volkswagen's Autostadt in Wolfsburg, Germany.
Fortunately, the importance of integrity was instilled in me early in my family life and then continued in my work life. Early in my career, after moving from GE Capital to the legacy Economics Research Associates (ERA) in London, I had an experience dealing with a client who was very disappointed with our findings, and despite the clarity of our findings, resisted accepting our results and recommendations. However, in the room with me was Keith James, JRA's CEO/Owner, whose support of me and our views helped convince the client that our findings and recommendations were not only reasonable, but would help the client from making a big mistake in oversizing (and hence overinvesting in) a potential project, even though this meant a likely lower fee for JRA to design/plan the project. This kind of integrity is good for everyone involved, and is critical to the success of an individual attraction and our industry as a whole.
JRA: Once you’ve determined that a project is a “go”, what is your continued role in the project, if any?
Brian Sands: After substantially completing our market and feasibility study, we are sometimes asked to provide ongoing services to the client, which may range from updating our study due to change in the market’s characteristics or competitive landscape, to evaluation of the potential for the use of new technologies, to comparison of the project’s actual performance versus what we had forecast and consideration of the reasons for variations. We are also oftentimes asked to work again on projects years after they open as consideration is given to changing or repositioning. Finally, successful attraction projects are oftentimes rolled out in new locations, and we may be asked to conduct studies to evaluate the potential for a project in one or more new locations.
JRA: Any other points you think our readers should be aware of?
Brian Sands: One of the best parts of the job is working with a broad range of other specialists in the industry, including designers/planners, architects/engineers, operations/management consultants and many others. We look forward to continuing to help our clients and colleagues in the industry to develop and operate successful projects, and we are always available to discuss projects and the industry more generally.
JRA offers a big thanks to Brian Sands and the entire AECOM team for this blog and for helping us on projects around the globe. We'll continue our feasibility month with a three-part series on determining capacity. How many people do you plan on entertaining with your theme park or museum? And how do you ensure that you have the right combination of amenities to accommodate them all? We'll answer these questions starting Friday, so stay tuned, and thanks for reading the JRA Blog.
AECOM celebrates at the Themed Entertainment Association's Thea Awards Gala, considered the "Academy Awards" of the themed entertainment industry.
Tags: Blog N Learn
July 09, 2015
Brian Sands of AECOM demystifies project feasibility.
When developing a museum or attraction project, sometimes the biggest question is whether it should be developed at all. Even the best intentioned project can fall short if it does not fit the target audience demographic or is not situated in a geographical area with enough of a population to provide consistent attendance. Perhaps the entertainment market in a particular locale is already saturated, making it more practical (and profitable) for an attraction or museum to situate itself elsewhere.
For more than 50 years, our friends at AECOM have been helping attraction museum developers tackle these tough issues and set a course for success. Building off our summary of the AECOM/TEA Theme Index earlier this week, we've asked Brian Sands, Vice President / Principal - Economics at AECOM, to deconstruct the feasilbilty step of the project development process. In Part One of our two-part "Feasibility 101" course, Brian will explain the "why" of bringing on a feasibilty consultant, as well as the questions you should ask a firm like AECOM and the questions they will ask you. In next week's Part Two, he'll help us get down to the nuts and bolts of feasibility analysis and how a consultant can help you determine the "whether", "where", "when" and "how" of your project.
JRA: Thanks for talking with us today, Brian. Let's start with the obvious - why is a market and feasibility consultant important?
Brian Sands: The primary role of a market and feasibility consultant, also known as an economic consultant, is to provide an independent, experienced, and somewhat conservative assessment of the markets, demand potential, and financial feasibility of the proposed project. Essentially, while every project developer, as well as all of the other parties working on a project, would like to think of themselves as having an unbiased and reasonable view of the potential for a proposed project, experience shows time and again that it is easy for many reasons to overestimate the potential or to mis-position the project, or both. The economics consultant’s role is to help balance the natural enthusiasm brought to the project by the other parties with market realities to ensure financial success.
From left, John Robinett, Linda Cheu and Brian Sands of AECOM summarize their Theme Index Report at the annual TEA Summit Weekend.
JRA: When should clients bring an economic consultant onboard for a project?
Brian Sands: Generally, the time for an economic consultant to start evaluating a project’s potential is relatively early in its development, once the general concept has been determined (at least in outline form) and a specific location (or multiple alternative locations) has been identified. Involvement at this stage provides the opportunity to modify the project in various ways in response to the findings, which might include changes to the concept, location, target visitors, preliminary physical planning, pricing, and the like, and could even affect other key factors, such as the scale, phasing, investment level, land price or lease rate, licensing/branding deal, and management fees. Typically, the economic consultant starts work a few months ahead of the attraction planning/design team, enabling findings from the economic analysis to inform their work.
JRA and AECOM have teamed on over a dozen projects, including Ferrari World Abu Dhabi.
JRA: What questions should they ask you?
Brian Sands: The developers of projects range from relative industry newbies to very experienced developer/operators, but generally they are smart and experienced enough to know what kind of questions to ask. This typically includes questions like the following:
JRA: What questions do you ask them?
Brian Sands: The exact questions will vary depending on the nature and status of the proposed project as well as the client’s profile, but generally we’d like to know the following before starting to put a proposal together:
So we've determined the right questions. Tune in next week as we discover the process for finding feasibility answers.
JRA and AECOM also collaborated on World of Coca-Cola.
Tags: Blog N Learn
July 08, 2015
The Wizarding World of Harry Potter - Diagon Alley at Universal Studios Florida serves as the cover for the TEA/AECOM 2014 Theme and Museum Index. Image courtesy Themed Entertainment Association.
Re-investment. Mixed used development. A growing excitement for the major attractions that will soon be opening their gates. These were the recurring themes outlined in the Themed Entertainment Association (TEA)/AECOM 2014 Theme and Museum Index.
For nine years, TEA and AECOM have collaborated on the report, which lists the global and regional attendance rankings for 190 theme parks, water parks and museums. AECOM, an economic feasibility firm with more than 50 years of experience, derives its attendance figures from the attractions themselves, as well as historical numbers, financial reports, local tourism organizations and other professional sources. “When operators share their information, it is good for the industry,” said the report, as these data points help the industry recognize what drives attendance fluctuations.
A Global Overview
According to the Index, what drove fluctuations in 2014 were a commitment to attraction reinvestment, expansion and refurbishment, as well as a growing middle class (particularly in Asia) that is demanding more entertainment options. Globally, the top 25 parks saw combined attendance growth of 4.1% (223.5 million, up from 214.7 million), indicating a continued post-Recession recovery path. Asia experienced the biggest attendance gain of five percent, followed by Europe with three percent and the Americas with two percent. Walt Disney, Merlin, Universal and China’s OCT Parks Group still top the theme park operator list, but new conglomerates such as Chimelong Group and Songcheng Worldwide have cracked the Top 10. Theme parks enjoying the biggest attendance increases included China’s Songcheng Park (38.3%), Universal Studios Florida (17%), Universal Japan (16.8%), and Universal Hollywood (11%). Europe again dominated the museum attendance list, with nine institutions in the top 25, followed by six in North America and five in Asia.
The Wizarding World of the Americas
According to Vice President / Principal – Economics, Brian Sands (who you’ll hear from later this week on the JRA blog), “within a mature market there is still room for great achievements and breakthroughs.” Even though the US is the grandfather of themed entertainment, technological innovation and the use of intellectual property still result in major gains for American parks. The Wizarding World of Harry Potter expansion at Universal Orlando Resort, which included Diagon Alley and the Hogwarts Express, set the standard for both. “The sooner you can get IP to move from a screen to a physical environment,” wrote Sands, “the sooner you can reap the rewards, and the larger those rewards may be.” Disney hopes to reap some rewards of its own with opening of Avatar Land at Disney’s Hollywood Studio in the coming years.
Gringotts™ Money Exchange is one of several attractions in Diagon Alley™.
Not all parks are spending nine figures and up to refresh their attractions. Smaller parks are seeing benefits from even the most modest renovations to their food, ride and show offerings, and are adding accommodations to increase visitor length of stay. The continued strengthening of the US and world economies will only help to drive domestic and foreign tourists to these updated attractions. But challenges remain. While the post-recession outlook has improved, middle class incomes remain relatively stagnant. Parks need to raise ticket prices in order to raise capital for improvements, but they run the risk of pricing families out of the market. These attractions will need to keep an eye on shifting economic and cultural demographics and continue to reassess their future plans to meet the changing needs of their audiences.
Asia-Pacific – The New Entertainment Powerhouse
According to the report, in Asia, “demand from the market, population and tourism are all in an up-cycle.” China served as the catalyst for this up-cycle, enjoying fundamental market growth due to increases in domestic wealth and tourism. Ten Asian parks graced the Index’s Top 25, fueled by such attractions as the new Wizarding World of Harry Potter at Universal Japan, the Tokyo Disney Resort's 30th Anniversary "Happiness Year", and the debut of Chimelong Ocean Kingdom. The Harry Potter-fueled reinvestment, open only six months in 2014, broke park record attendance for the entire year. Likewise, by adding a 4,500-seat theater and beefing up its group sales and tour program, Songcheng Park in China doubled its capacity.
Chimelong Ocean Kingdom - Hengquin, Zhuhai, China
With Shanghai Disney opening in 2016, and dozens of other park projects in the pipeline, growth in Asia is expected to only continue in the coming years, and AECOM projects the Asian market to surpass the US by 2020. This rise is due not only to increasing income levels and a growing middle class, but also to the Chinese government’s realization of tourism as an economic and employment driver. With 200 cities housing a population of one million or more, and currently a lack of attractions to entertain them, China is particularly well-positioned to support significant theme park and attraction growth.
Increasing the quantity of Asian parks doesn’t necessarily mean giving up quality: “smarter players understand the potential, and the market is moving up to a better quality product.” Case in point: in addition to its parks, Chimelong has constructed a destination resort with one hotel built and two more in process. Its 350 RMB admission fee demonstrates that visitors will pay for a higher standard of product. Chimelong’s two parks welcomed nearly nine million visitors in 2014, and this past spring its Ocean Kingdom resort received the industry’s top honor, the Themed Entertainment Association’s Thea Award. By continuing to reinvest, emphasizing quality and meeting the demands of the public, the Asian market will continue its meteoric rise, and we will see even more Asian parks cracking (and dominating) the Index’s rankings.
Europe and the Middle East – Small Gains, Big Prospects
Within the Europe, Middle East and Africa (EMEA) region, growth remained steady, but expectations are running high for several attractions scheduled to open in the next few years. Dubai is at the epicenter of this excitement, driven by its position as the host of the 2020 World Expo: “there is great anticipation in Dubai when some of the large theme park complexes get closer to finalizing construction and opening their gates,” wrote Margaret Papamichael, AECOM’s EMEA Director. Governments from the Irish Sea to the Arabian Gulf see the tourism value of attraction-based entertainment, and are investing in projects such as Paramount London and Dubai Parks & Resorts.
In the Middle East, family entertainment centers (FECs) are opening up in conjunction with retail developments, offering visitors a fun indoor respite from the outdoor, almost year-round sizzle. Not surprisingly, this sub-region has also been a trailblazer for waterparks, offering aqua oases with homegrown intellectual property and rides of theme park sophistication. The Index studied EMEA waterpark visitation for the first time this year, and Dubai’s Aquaventure Waterpark topped the list. With several waterparks recently built and more on the way, expectations run high for more UAE attractions to top the list.
Aquaventure Waterpark - Dubai, United Arab Emirates (UAE)
Europe saw moderate attendance increases to its parks, with all but the French Disney properties welcoming a greater number of visitors than in 2013. Southern European parks are catching up to their Northern counterparts, due to the sub-region’s continued economic recovery. Northern European attractions profited from reinvestment and a favorable weather in 2014, while the political climate of Russia stymied economic development in the country. Intellectual property continued to drive development in parks across the region, but some parks, like Germany’s Europa Park and the Netherlands’ De Efteling, continue to favor their native IPs over global brands.
Museums – Coming of Age
Blockbuster temporary exhibitions continue to be the name of the game for museums worldwide. Tate Modern saw huge attendance gains for their Matisse exhibition, and the EMEA region saw 2.8% growth overall. “Museums have become masters of the mega-blockbuster,” said Will Gompertz, BBC Arts Editor. “Big once-in-a-lifetime exhibitions like the Matisse at Tate Modern or Rembrandt at the National Gallery…become must-see attractions.” Renovations, such as the one at the Museum of London, and future openings, such as Saadiyat Island and the Louvre Abu Dhabi, will keep industry eyes peeled for shifts in these museum rankings.
But EMEA museums aren’t the only ones focused on re-investment. Like their theme park counterparts, American museums realize that they are the elder statesmen of the industry and are looking to refresh not only their exhibitions, but also their mindsets. They are actively exploring new technologies, and they are looking to other industries, from consumer products to entertainment, as inspiration for creating quality guest experiences. As we pointed out in our Trendswatch analysis earlier this year, today’s museums have become increasingly focused on Millennials and are attempting to attract them through personalized, “only-here” offerings. They are re-examining their strategic planning processes and exploring new avenues for revenue generation, including licensing, franchising, and partnerships with for-profit entities.
In Asia, the world’s youngest culture market, the emphases are on better, faster and more. Museums often find themselves as part of larger mixed-use developments, with world-class architects employed to design them. The flip side of this building boom is that because so much money is spent on the exterior, there is often little left for such crucial components as collections, operations, maintenance and personnel. Indeed, as the Index demonstrates, there is still a substantial learning curve for museums in Asia, and despite cultural collaborations with their Western counterparts, the museum industry, particularly in China, is “yet to be fully developed.” With the Taipei City Museum of Art, the National Art Museum of China, the Shanghai Planetarium and the Hong Kong M+ all scheduled to open before 2020, the question remains as to whether the level of refinement of Asian cultural institutions will increase as the market matures.
The generally rosy figures illustrated in the 2014 Theme and Museum Index paralleled the slow but steady worldwide economic recovery. Those museums, theme parks and water parks seeing big gains are the ones making big moves – reinvesting in existing infrastructure, adding new blockbuster rides, shows and exhibitions, and diversifying their offering portfolio with retail, restaurant and accommodation options as part of large-scale developments. With some highly anticipated attractions only a few years (if not months) away, the Index and the industry landscape should prepare for a major shift, and regions that were once behind the curve may leap to the front of the pack. More than merely a list of which parks and museums rule the roost, the Index serves as an indicator of visitor tastes, and right now, visitors want new technology, personalized experiences, more reasons to stay longer and more reasons to return. And as their disposable incomes continue to increase, so will their appetites for entertainment. Drawing from Index data, museum and attraction developers can anticipate, and take advantage of, the latest consumer trends. “Knowing what works, what doesn’t work – and where and why – allows operators to make wise investment decisions and to know what results can be expected. That’s the heart of market and feasibility analysis.”
Tomorrow, we interview AECOM’s Brian Sands to decipher what exactly “market and feasibility analysis” means, and what it can do for your museum or attraction project.
Tags: Blog N Learn